Japanese energy giant Jera invests $1bn in Bangladesh
Jera took over the Indian Reliance’s Meghnaghat 718 MW power plant in 2019 and has till date seems to have brought in $1 billion for the project
Japan’s Energy for a New Era [Jera] Co Incis Japan’s largest power generation and energy company with existing generation capacity of 61,000 MW in Japan (which is 30% of Japan’s electricity) and 13,700 MW in overseas locations (including Philippines, Thailand, Indonesia).
In Japan, Jera handles the LNG supplies to the power plants on its own. It has been handling LNG supplies of 35 MTPA is one of the world’s largest with investments in 6 upstream projects and having LNG suppliers from 15 different countries.
Investing in Bangladesh
Jera took over the Indian Reliance’s Meghnaghat 718 MW power plant in 2019 and has till date seems to have brought in $1 billion for the project, which will be Bangladesh’s largest gas-based IPP.
The project has significant investment by Japan Bank for International Cooperation (a private development bank like Jica), together with Asian Development Bank.
The other banks investing in the project are Mizuho Bank, SMBC, MUFG, and Societe Generale, all backed by Nippon Export and Investment Insurance.
The project has secured major equipment from General Electric (GE) and Samsung C&T Corporation has built the project based on the Engineering, Procurement, & Construction contract.
But it is learnt that since taking over the project in 2019, the project has been facing delays at several steps, be it the gas pipeline or the power grid infrastructure or gas supply. While some local power plants got priority in gas pipeline connection or gas supply, Jera’s project had to construct a branch pipeline at its own cost at first. Once completed, it has been sidelined for gas supplies.
The project has been struggling to receive continuous gas for the commissioning and operations for the last 8 months.
Smitesh Vaidya, head of contracts & commercial at Jera Meghnaghat Power Limited, said: “The project achieved significant progress and is only a few days away from commissioning, subject to continuous gas supply.” Thanks to the strong support of Jera as sponsor, the project has been able to sustain till now. We requested support from the Power Ministry, BPDB and PetroBangla for achieving commercial operations within December this year. With the state-of-the-art facility, most efficient turbines, and low tariff, Jera Meghnaghat project would add a great impetus to ensuring uninterrupted power supply in Bangladesh.”
Jera has also shown strong interest in setting up the Matarbari land-based LNG terminal.
It operates 11 LNG terminals in Japan, all of which are land-based. Japan is prone to several environmental disasters and such land-based terminals provide a stable source of energy to the country.
Bangladesh on the other hand, despite being prone to cyclones and bad weather in the Bay of Bengal, has 2 floating-ship based FSRUs.
This year alone, at least 1 of the FSRUs was unavailable for operations for more than 9 months, significantly hampering the gas supplies.
Therefore, it is in the nation’s interest that the interim government looks at quickly setting up the land-based terminal in the country to ensure continuous energy supplies.
In one of the letters written to the government, Jera mentioned: “Jera is interested in future investments in the land-based LNG terminal project, renewable project development (solar, wind), alternative energy (hydrogen, ammonia) and LNG supply. Such investments would amount to FDI of around $2-$3 billion in the next 5-10 years. From a long-term perspective, Jera would also look at promoting net zero emissions for Bangladesh and would like to work together for a sustainable future of the country. In future, Jera intends to establish a local office in Dhaka.”
Japan has been a strong friend of Bangladesh since the independence of the country. Through Japanese funding, Bangladesh has been able to set up several infrastructure projects, contributing to the growth of the country.
Source: Dhaka Tribune | 26 November 2024
